It was founded in 1958 as the National 132th Factory in Chengdu, Sichuan, to be an aircraft supplier for the Chinese military.

Chengdu Aerospace has been cited for its success in developing China's first fifth-generation aircraft and stealth fighter jet.

132 factory began a new period of development and the facility's focus was slowly shifted to scientific research and production.

Developing and producing the J-7M in 1984 was an important achievement as it was then China's most advanced light fighter aircraft.

In 1988 a sub-contracting arrangement with the United States was formed and CAC was involved with the production of the McDonnell Douglas MD-80.

Further reforms to the labour system occurred in 1994, with greater attention paid to business regulation and workers' rights.

Sub-contracting production projects were expanded in 1995 with firms in the U.S. (McDonnell Douglas and Boeing), South Korea and Singapore.

The company's sales revenue in non-aviation products exceeded 1 million for the first time in 1996 after increased focus on this area.

The J-7G also made its maiden flight and contracts were signed with Dassault for production of Falcon 2000EX fuel tanks.